Kenneth Clarke, the justice secretary, has warned that newspapers must not "underestimate the crisis of confidence" that the press faces in the wake of the phone hacking scandal.

But he added that the media should not become "paranoid" about the nature of the changes required because nobody is seriously "threatening the freedom of the British press" with heavy-handed reform.

Speaking at the Society of Editors annual conference on Monday, the day the Leveson inquiry into media standards and practices began at the high court in London, Clarke said that he was not surprised by revelations of phone hacking.

He said: "What did shock me was the extent of what was revealed by the recent revelations. We must put ourselves in the shoes of the ordinary members of the public."

Clarke said that targeting so many people's telephones and "following the lawyers and politicians" involved in investigating News International were "getting into quite a serious area" – and that "the public are bound to note the reluctance and refusal to investigate".

The veteran Conservative MP and cabinet minister also questioned whether politicians of "all political parties" had become reluctant to criticise the press when problems emerged because that "seemed to get in the way of the currying of favour that politicians have engaged with editors and proprietors down the years".

Clarke indicated that the government wanted to leave proposals for reform with the Leveson enquiry, and he called upon the judge to deliver a "measured response". Elsewhere, using similar language, he said: "We don't want imposition of ludicrous quangos or statutory provision, but we do want some balanced response."

The minister was also pressed by Richard Caseby, the managing editor of the Sun, to consider the introduction of a public interest defence for journalists under the Bribery Act.

He complained that the lack of a public interest defence meant that the reporter conducting the sting was potentially at risk of prosecution – and so was he as managing editor of the red top because he had personally authorised it.

However, Clarke said that he was not minded to consider a change to the law, arguing that "there has never been a public interest for bribery". Instead, he said that the public interest considerations would be taken account when the Director of Public Prosecutions gives the go ahead to bring a case to court.

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